Inflation continued to rage unchecked last month as the government's consumer price index leaped another one percent despite a substantial slowdown in food and energy price increases, the Labor Department reported yesterday.
Consumers in the Washington area received a partial respite as grocery prices here actually decline 0.4 percent as a result of a local price war between A&P's new discount stores and Giant's price-cutting campaign.
However, prices nationally continued to rise sharply in a broad range of categories, further eroding the purchasing power of the average worker. Housing costs soared 1.5 percent, following a 1.2 percent jump in September.
The figures came as, separately, Chase Manhattan Bank, the nation's third largest, slashed its prime interest rate by half a percentage point to 15 1/4 percent -- a quarter percentage point more than other banks cut on Monday.
Although Chase's action bolstered the notion that the turnaround interest rates genuine, Chase itself warned against expecting any further cuts soon, and many other banks hesitated to cut their prime rates at all.
The announcement by Chase sparked another rally in the stock market, but those gains evaporated abruptly in the early afternoon when U.S. Steel Corp. announced it was laying off 13,000 workers at plants across the nation.
Meanwhile, the dollar held firm on foreign exchange markets, buoyed by expectations that interest rates here have peaked. Gold prices continued to edge downward, in part because of the rebound of the dollar.
The one percent increase in consumer prices was essentially the same as in September, when the index rose 1.1 percent. For the first 10 months of this year, retail prices have soared at a 13.1 percent annual rate.
Moreover, Robert R. Russell, director of the Council on Wage and Price Stability, said yesterday he doesn't see any hope of "significant moderation" in inflation for at least several more months.
The wage-price council announced yesterday it formally was citing five more labor unions for violating the administration's 8 percent wage guidelines, but it is considered unlikely that the council will take any action to punish them.
So far, the White House has named 13 unions or corporations for violating either the wage or price standards, but has yet to use its power to deny federal contracts to any of them.
White House officials had been predicting that inflation would slow late this year, in part because energy prices would begin to level off. But other prices have risen so fast that officials have abandoned those assertions. o
The report on consumer prices yesterday contained these details:
Food. Supermarket prices nationally slowed significantly in October, rising 0.7 percent compared with a 1.1 percent jump in September. Fresh fruit prices plunged 1.2 percent, but beef and pork prices surged anew.
Energy. Energy prices slowed substantially as last summer's crude-oil price increases worked their way through the economy. Energy prices rose 1.1 percent overall in October compared with 2.7 percent in September.
Gasoline prices nationally rose 1.8 percent last month compared with increases of 3.5 percent in September and 4 percent in August. The price of home heating oil rose 1.5 percent, down from a 5.6 percent jump in October.
Housing. The cost of buying and furnishing a home soared 1.5 percent in October, following a 1.2 percent increase in September. Both house prices ad home mortgage interest rates were up sharply. CAPTION:
Graph, Prime Lending Rate